Shahab-e-Saqib

Beyond desktop and mainframe computing, advent of shared applications is another way to meet some or almost all aspects of information technology (IT) needs. Concept of application service provision has come a long way since it first came on the scene in the late 1990s? Originally, the idea of virtual cooperation and application sharing came from Bill Davidow, a venture capitalist and entrepreneur. What Bill foresaw as the future of computing is already in practice; a new IT business model.

Hi-tech developments and changes at a fast rate are moving towards convergence of the software, information, technology carriers, and computer engineering. Result: IT structural designs are shifting from desktop and mainframe environments towards Internet based structures. Similarly, software applications are altering from made to order and separately owned solutions towards pre-packaged and Web based solutions. It is in this context that ASP business model is getting more interest as a hot trend.

IT business model that offers end users – small and large businesses, government organizations, non-profits, and membership organizations even individuals - an access to applications and services over the Internet is known as application service provider (ASP - not to be mixed with Active Server Pages. It also is a commonly used abbreviation of as soon as possible). It is sometime called software-as-a-service, on-demand computing, apps-on-tap or utility computing.

Typically, the applications are deployed by a third party that hosts, manages, updates software based services and solutions and distributes to clients from a central location. XML and HTML processes allow thee clients to interact with the software. Sometime, ASP also rent out the server hardware and the network. What is more, many ASPs, particularly enterprise ASPs, have now started offering on site solutions in which the relevant hardware, software and function remain on the customer's site.

Services provided by ASPs can be grouped in different categories. As per International Data Corp, they are commercial enterprise applications (customer relationship management, enterprise resource planning, e-commerce, data warehousing and programs to support vertical industries), collaborative applications (programs that enable internal operations such as e-mail, groupware, document creation and management messaging) and applications for personal use (games, entertainment software, home-office applications and any other software).

Broadly speaking, there are four major types of ASP business: A special function ASP that offers a single application, such as banking service like control of remittance or loan management; An ASP delivering a solution package for a similar customers type, such as a hospital management; A project ASP that give a mixed group of solutions; and an area based ASP that caters to the IT needs of businesses within a specific area. In addition, some large firms like IBM are using ASP methodology as a specific business model that supports specialized clientele. According to ASPnews.com, "ASPs are grouped into five subcategories: Enterprise ASPs -- deliver high-end business applications. Local or regional ASPs -- supply wide variety of application services for smaller businesses in a local area. Specialist ASPs -- provide applications for a specific need, such as Web site services or human resources. Vertical Market ASPs -- provide support to a specific industry. Volume Business ASPs supply general small and medium-sized businesses with pre-packaged application services in volume."

The main advantage of ASP is that the clients do not have to bear the up front capital costs of the hardware and software. They can pay like electricity and or PTCL landlines on a pay per use or yearly license basis. The interest that ASPs have generated, elsewhere at least, does not come only from economy of investment, but from qualitative considerations as well. Using the best applications available, faster than in house deployment are some others benefits. Businesses, though an ASP, can change their operational characteristics, placing less emphasis on IT operations and development, and more on core business operations and growth through the productive use of IT.

The ASP phenomenon is poised to make a central surge on the application market for the years to come. The ASP model can be tempting to any cost conscious businesses but scouting reveals that the ASPs around the world so far are targeting small and medium businesses and start ups, which otherwise may not afford high end and costly applications; selling their software and enabling end users to avail the utility they need at inexpensive price. Small and medium businesses can rely on ASPs and can start using the Web as a business tool rather than a communications tool. The target market for ASPs is much larger in developing countries than in developed ones. Economic conditions and desire to have a competitive edge are likely forces to accelerate adoption, anxieties associated with exercising control over the business processes notwithstanding.

ASP model is one of the economical behind the scenes business methodologies that the Web has made possible and it is working very successfully in more connected world. Many industry analysts see ASPs becoming a big business. ASP concept is ideal for countries like Pakistan. The impact of any such development may be seismic here.

The concept of ASP is still new in Pakistan. One impediment seems standing in the way of ASP business picking up in Pakistan is societal rather than technological. In a number of ways corporate sector seems to have distrust in IT solutions what to talk of shared ones. Dr. Ehsan Malik, an international marketing expert, opines, "The generation at the helms of business affairs, mostly family run, thinks that what has been working for them in the past is good enough. They hesitate to take new incentives into the untested area. The strength of this social impulse reins back the widespread IT employment in any area." Other limitations with the ASP employment are poor or lack of necessary infrastructure, slow speed or non availability of Internet access or things like electric shutdowns.

ISPs are most suited to transform themselves into ASPs. The only thing they can do before that is to become dependable. Which application they should offer: Customer relationship management applications, enterprise resource planning applications, banking and credit card transactions, hospital management or simple email management? It depends on the market demand. ASPs have to carry out diligent research and interact with potential users to carve out niche areas for themselves. Though, initially small and medium businesses seem the most likely users of ASP, in Pakistan, larger organisations could also convert to this method and cut IT costs. Ironically, when various ISPs were contacted for finding out about any possible future plans for the purpose of this article, the answers were not very encouraging. No one revealed that they have any plans to expand as ASP.

What would constitute a world class ASP business? Local companies have the opportunity of learning from the successful experiences in the developed countries by closely examining the standards being implemented and the demands made by the end users companies. Because every thing cannot be mirrored in local corporate sector, therefore, they should carry out thorough indigenous research and interact with their potential customers. Interested IT firms should help small and large commercial enterprises to identify their IT needs in term of economic profits and then offer the solutions. Stakeholders should take extensive confidence building measures in this field.
Originally by SAJ Shirazi.